Basis of preparation
The consolidated financial statements of the Group have been prepared in conformity with the requirements of the Companies Act 2006 and in accordance with United Kingdom adopted International Accounting Standards. The financial statements are prepared under the historical cost convention as modified by the revaluation of investments and assets in the Group\u2019s defined benefit pension schemes. They are presented in Sterling and all values are rounded to the nearest thousand (\u00a3\u2019000).
The accounting policies remain unchanged from the previous year except for the modification of a number of standards with effect from 1\u00a0January 2024. The adoption of these amendments had no material effect on the Group\u2019s financial statements.
The preparation of financial statements in accordance with International Financial Reporting Standards (IFRS) requires the use of estimates and judgements that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the year. Although these estimates are based on management\u2019s best knowledge of\u00a0the amounts, actual results may ultimately differ from those estimates. The most significant judgements and estimates made by management in these financial statements are set out in the accounting policies to which they relate.
Government and societal responses to climate change are still developing and are interdependent upon each other, and consequently financial statements cannot capture all possible future outcomes as these are not yet known. There were no material impacts of climate change\u00a0in determining asset and liability valuations and the timing of future cash flows to be incorporated into these financial statements.
Mears Group PLC is the ultimate parent company of the Group. It is incorporated and domiciled in the United Kingdom (registration number 03232863). Its registered office and principal place of business is 2nd Floor 5220 Valiant Court, Gloucester Business Park, Brockworth, Gloucester GL3 4FE. Mears Group PLC\u2019s shares are listed on the Main Market of the London Stock Exchange.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147891": { "value": "Sterling", "dimensions": { "concept": "ifrs-full:DescriptionOfPresentationCurrency", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147892": { "value": "nearest thousand (\u00a3\u2019000)", "dimensions": { "concept": "ifrs-full:LevelOfRoundingUsedInFinancialStatements", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147893": { "value": "Mears Group PLC", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147894": { "value": "Mears Group PLC", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147896": { "value": "Mears Group PLC", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147890": { "value": "the United Kingdom ", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147889": { "value": "2nd Floor 5220 Valiant Court, Gloucester Business Park, Brockworth, Gloucester GL3 4FE", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147898": { "value": "Basis of consolidation
The Consolidated Balance Sheet includes the assets and liabilities of the Company and its subsidiaries and is made up to 31\u00a0December\u00a02024. Entities for which the Group has the ability to exercise control over financial and operating policies are accounted for as subsidiaries. Control is achieved where the Company has existing rights that give it the current ability to direct the activities that affect the Company\u2019s returns and exposure or rights to variable returns from the entity. Interests acquired in entities are consolidated from the effective date of acquisition and interests sold are consolidated up to the date of disposal.
All significant intercompany transactions and balances between Group enterprises, including unrealised profits arising from intra-group transactions, are eliminated on consolidation; no profit is taken on sales between Group companies.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group\u2019s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholders\u2019 share of changes in equity since the date of the combination.
A joint venture is a joint arrangement whereby the parties that have joint control have the rights to the net assets of the arrangement. Associates are entities over which the Group does not have control but has significant influence. Investments in joint ventures and associates\u00a0are accounted for using the equity method of accounting. Under this method, the Group\u2019s share of post-acquisition profits or\u00a0losses\u00a0is recognised in the Consolidated Statement of Profit or Loss; the cost of the investment in a given joint venture or associate, together with the Group\u2019s share of that entity\u2019s post-acquisition changes to shareholders\u2019 funds, is included in investments within the Consolidated Balance Sheet.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147895": { "value": "Going concern
The Directors do not consider going concern to be a critical accounting judgement. In reaching this determination, the Directors have taken account of the Group\u2019s trading for 2024 and the budget for 2025.
The Group reported a net cash position of \u00a391.4m on 31 December 2024, but the Directors believe that the average daily net cash, after adjusting for the full-year impact of the share buybacks and AASC property acquisitions, which averaged \u00a359.3m during 2024, provides a better indication of the underlying position and is a better indicator of the Group\u2019s liquidity. The Group has modelled its cash flow outlook for the period to 30 June 2026 and the base forecast indicates significant liquidity headroom will be maintained above the Group\u2019s borrowing facilities and that financial covenants will be met throughout the period, including the covenant tests on 30\u00a0June\u00a02025, 31 December 2025 and 30 June 2026.
The Board approved a budget for 2025 which was considered to reflect strong performance, albeit both operating margin and profit were modelled at a lower level than 2024. The 2025 budget is considered to be the base case projection for assessing going concern and is based on the following assumptions:
Forecast built up on a contract-by-contract basis for the next 12 months and rolled forward. The forecast for 2025 is based upon revenues generated from existing customer relationships, and a business that is generating contract margins that are broadly in line with recent run rates.
1. Accounting policies\u00a0continued
Going concern\u00a0continued
The forecast assumes no new work is secured. The base case assumes that contracts are resecured on retender but reflects some revenue reduction from existing clients when it is currently anticipated that there may be no further opportunity upon expiry of the current contract.
The model also reflects the normalisation of the Asylum (AASC) contract, with revenues reducing to a level reflecting the preferred delivery through dispersed accommodation and the closure of short-term contingent accommodation, such as hotels.
The model assumes a partial unwind in the negative working capital position held in the management-led activities; the base case assumes a reduction in contract liabilities of \u00a335m, matched by a cash outflow.
The model assumes small-scale property purchases to augment the delivery of the AASC contract but no further sale and leaseback of previously acquired properties.
Future dividends continue in line with current policy.
No further buybacks have been assumed beyond the current shareholder authority.
The Group is well positioned, underpinned by the non-discretionary nature of the Group\u2019s activities and public sector client group. The\u00a0Board has communicated its capital allocation policy to stakeholders, and a key pillar of this policy is to maintain a net cash position on a\u00a0daily basis.
In making their going concern assessment, the Directors are required to consider whether there is a reasonable expectation that the\u00a0Group and Company have adequate resources to continue in operational existence for at least 12 months following the signing of these financial statements. The Directors have adopted a going concern period for this purpose up to 30 June 2026. This assessment considers whether the Group will be able to maintain adequate liquidity headroom above the level of its borrowing facilities and to operate within the financial covenants applicable to those facilities, which will be measured on 30 June 2025, 31 December 2025 and 30\u00a0June 2026. On 31 December 2024, the Group held \u00a370m of undrawn committed borrowing facilities, maturing in December 2026. The principal borrowing facilities are subject to covenants as detailed in the Financial Review on page 54 of the Strategic Report. The\u00a0Strategic Report also details the principal risks and uncertainties and how the Group manages its risks.
In making its assessment of going concern, the Board has confirmed that there have been no post-balance sheet changes that have a\u00a0material impact on the business or affect liquidity.
A range of scenarios that encompass the principal risks have been applied to the base case and are set out below. These downside cases were prepared by management to illustrate the impact of adverse changes in key variables used within the base case forecast and projections. These downside cases were intended to illustrate a reasonable worst-case scenario that could affect solvency or liquidity in \u201csevere but plausible\u201d scenarios.
The Directors have considered three scenarios and the following sensitivities have been applied to each downside case:
Downside case 1: a significant reduction of 50% in revenue relating to the Group\u2019s largest contract (AASC).
Downside case 2: a significant margin dilution event, possibly caused by a combination of the additional cost pressures resulting from the increase in Employers\u2019 National Insurance combined with increasing budgetary pressures experienced by Local Government clients. The downside scenario modelled a 2.0% reduction in operating margin. Given the low margin nature of the business, a small increase in the cost base which is not recovered in charge rate increases can cause significant margin dilution.
Downside case 3: an event linked to a cyber breach impacting upon lead operating systems causing an additional 30 days\u2019 revenue tied up in working capital.
No mitigating actions were included within any of these downside scenarios, which was considered conservative and unrealistic. Before\u00a0applying mitigations, none of the three downside cases detailed above resulted in the Group exhausting its liquidity or breaching\u00a0covenants. Mitigating actions that would be available to management include a reduction in central overheads, a reduction in\u00a0discretionary capital expenditure, changes to\u00a0capital allocation policy (including the ordinary dividend) and more robust working capital management around covenant test dates. In\u00a0addition, upsides that are available to the base case include generating an improved\u00a0margin at a local contract level over and above the current run-rate and securing new contract awards.
The viability review concluded that climate related risks would not have a significant impact on the business within the four-year viability review period. As such, climate was not modelled in respect of the shorter going concern review period.
The Group has carried out stress tests against the base case to determine the performance levels that would result in a breach of covenants or a reduction of headroom against its borrowing facilities to \u00a3nil. The Directors carried out reverse stress testing, increasing the severity of the assumptions to measure the trigger points at which the going concern of the Group could be impacted. A reverse stress test was conducted to identify the magnitude of trading profit decline required before the Group breaches its debt covenants. All\u00a0stress test scenarios would require a very severe deterioration compared to the base case forecasts.1. Accounting policies\u00a0continued
Going concern\u00a0continued
In the most extreme reverse stress test:
The Directors modelled a reduction in profit which would trigger a breach in covenants. The base case annualised profit of c.\u00a350m would need to decline to an annualised loss in excess of \u00a350m. This profit reduction is considered to be remote given Mears\u2019 long-term historical performance.
The Directors modelled a reduction in revenue which would trigger a breach in covenants. Revenue would need to decline by\u00a0in\u00a0excess of 50% when compared to the base case, to result in a breach of covenants. This revenue reduction is considered to\u00a0be\u00a0remote given the high proportion of Mears\u2019 revenue that is attached to long-term contractual arrangements.
After making these assessments, the Directors consider any scenario or combination of scenarios which could cause the business to be\u00a0no longer a going concern to be remote. The Directors have a reasonable expectation that the Company and its subsidiaries have adequate resources to continue in operational existence until 30 June 2026. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Accounts.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147903": { "value": "Fair value
The Group measures certain assets and liabilities at fair value on a recurring basis, including certain investments and assets in\u00a0the\u00a0Group\u2019s defined benefit pension schemes.
Trade and other receivables, trade and other payables and other loans are initially measured at fair value and are subsequently held at\u00a0amortised cost. Other assets are measured at fair value when they are assessed for impairment or on classification as held for sale.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Group uses valuation techniques that maximise the use of relevant observable inputs using the following valuation hierarchy, ordered from highest to lowest priority:
Level 1 \u2013 Quoted prices in active markets for identical assets or liabilities.
Level 2 \u2013 Inputs other than quoted prices included in level 1 that are observable either directly or indirectly.
Level 3 \u2013 Unobservable inputs, typically derived from the Group\u2019s own information with any necessary adjustments to eliminate factors specific to the Group.
For assets and liabilities measured at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by assessing the lowest level input that is significant to the most recent measurement.
Details of the particular valuation techniques used by the Group are provided in the relevant notes for each type of asset or liability measured at fair value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147904": { "value": "Use of judgements and estimates
The preparation of financial statements requires management to make estimates and judgements that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenditure during the reported period. The estimates and associated judgements are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources.
The estimates and underlying judgements are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
In the preparation of these consolidated financial statements, key estimates and judgements have been made by management concerning the following:
provisions necessary for certain liabilities, including discount rates used in estimating such provisions (note 20);
estimates used in forecasts used to assess future profitability and cash flows (note 20);
judgements involved in the recognition of right of use assets for lease accounting (note 14);
the timing of revenue recognition (note 2);
the recoverability of contract assets (note 17); and
actuarial estimates in respect of defined benefit pension schemes (note 25).
Actual amounts could differ from those estimates. Further details of key estimates and judgements are provided in the appropriate notes.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9151638": { "value": "Accounting policy
Revenue is recognised in accordance with IFRS 15 \u2018Revenue from Contracts with Customers\u2019. IFRS 15 provides a single, principles-based, five-step model to be applied to all sales contracts. It is based on the transfer of control of goods and services to customers. The detail below sets out the principal types of contracts and how the revenue is recognised in accordance with IFRS 15.
Repair and maintenance contracts
For contracts in this category, the customer raises orders on demand, for example to carry out responsive repairs. Revenue is derived from a\u00a0mixture of lump-sum periodic payments and task-based payments depending on the terms of the individual contract.
Where a lump-sum payment is in place it may cover the administrative element of the contract or may cover the majority of the tasks undertaken within that contract with exclusions to this being charged in addition to the lump-sum charge. For the works covered by the lump-sum payment, the performance obligation is being available to deliver the goods and services in the scope of the contract, not the performance of the individual works orders themselves. Revenue is recognised on a straight-line basis as performance obligations are being met over time.
For works orders not covered by a lump-sum payment, each works order represents a distinct performance obligation and, as the customer controls the asset being enhanced through the works, the performance obligation is satisfied over time. Each works order can be broken down into one or more distinct tasks which are either complete or not complete. The stage of completion of the works order is assessed by looking at which tasks are complete. The transaction price for partly completed works orders is recognised as cost plus expected margin. The transaction price for completed works orders is the invoice value, which is typically determined by a pricing schedule referred to as a Schedule of Rates that provides a transaction price for each particular task.
Contracting projects
For contracting projects, the contract states the scope and specification of the construction works to be carried out, for a fixed price. Mears is\u00a0continuously satisfying this single performance obligation as cost is incurred, determining progress against the performance obligation on either an input or an output basis. The customer controls the site or output as the work is being performed on it and, therefore, revenue is recognised over time where there is an enforceable right to payment for works completed to date and the work completed does not create an asset with an alternative use to the Group. An assessment is made of costs incurred to date and the costs required to complete the project. If a project is not deemed to be profitable, the unavoidable costs of\u00a0fulfilling the contract are provided for immediately.
Property income
Where the Group is acting as principal, lessor operating lease revenue is recognised in revenue on a straight-line basis over the\u00a0tenancy.
Where the Group is solely providing a management service in respect of tenanted properties, Mears recognises revenue as an agent (the net management fee) on a\u00a0straight-line basis.
Where the Group is providing an accommodation and support service, revenue is recognised at a point in time for each night that the accommodation is occupied.
Some contracts may include an element of variable revenue based on certain KPIs. This is recognised on the same basis as above.
Where the Group enters into arrangements with customers for the provision of housing, an assessment is made as to whether this income is recognised under IFRS 15 or IFRS 16. The contract between the Group and the customer is deemed to contain a lease where the contract conveys the right to control an identified asset for a period of time in exchange for consideration. In this instance, the rental income is recognised on a straight-line basis over the life of the lease. All such sub-leased residential property leases are classified as operating leases. Revenue in respect of sub-leased residential property is disclosed separately.
Care services
The standalone selling prices for providing care are overtly stated in the contract, and the method of application of the rate of charge is on a unit of time basis, usually expressed as a rate per visit. Revenue will be recognised in respect of this single performance obligation, by reference to the chargeable rate and time for completed care visits in the period.
From time to time, care contracts with customers include a fixed fee per period for performing a consistent scope of care services. For these contract types, the revenue recognition is consistent with lump-sum payments included in repair and maintenance contracts, as described above.
Other
From time to time, the Group receives revenue that does not fall within any of the categories above but is not individually significant enough to require a specific policy. In these cases, the revenue is considered separately and recognised in accordance with IFRS\u00a015.
Gainshare
Across all revenue types, some contracts include an element of gainshare. The details vary by contract, but gainshare is typically a reduction in the revenue that would otherwise be due from the customer based on a share of profits generated above a contractual target. Gainshare is typically agreed on an annual basis following the end of each contract year and where the profit share has not been agreed at a period end, management\u2019s best estimate of any profit share due to the customer is recognised as a reduction to revenue and included within contract liabilities.
Critical judgements in applying the Group\u2019s accounting policies
Revenue recognition
The estimation techniques used for revenue and profit recognition in respect of contracting and variable consideration contracts require judgements to be made about the stage of completion of certain contracts and the recoverability of contract assets. Each\u00a0contract is treated on its merits and subject to a regular review of the revenue and costs to complete that contract.
The Group\u2019s revenue disaggregated by nature is as follows:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Revenue from contracts with customers
Repairs and maintenance
455,058
453,981
Contracting
77,956
70,980
Property income
551,198
516,769
Care services
22,164
20,058
Other
635
1,005
1,107,011
1,062,793
Lease income
25,499
26,534
1,132,510
1,089,327
Repairs and maintenance and care service revenue is typically invoiced between 1 and 30 days from completion of the performance obligation. Contracting revenue is typically invoiced based on the stage of completion of the overall contract. Property income is typically invoiced monthly in advance. Payment terms for revenue invoiced are typically 30 to 60 days from the date of invoice.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147907": { "value": "3. Segment reporting
Accounting policy
Segment information is presented in respect of the Group\u2019s operating segments based on the format that the Group reports to\u00a0its\u00a0chief operating decision maker for the purpose of allocating resources and assessing performance.
The Group considers that the chief operating decision maker comprises the Executive Directors of the business.
The Executive Directors manage the Group as a single Housing business, but information provided to the Board and historically to\u00a0stakeholders has included a split between Maintenance and Management. Therefore, management has concluded that providing segmental information along the same lines would be helpful to the users of the financial statements.
5. Finance income and finance costs
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Interest charge on overdrafts and loans
(957)
(638)
Interest on lease obligations
(12,698)
(9,899)
Finance costs on bank loans, overdrafts and leases
(13,655)
(10,537)
Other interest
(93)
(642)
Interest charge on defined benefit pension obligation
(37)
(2)
Total finance costs
(13,785)
(11,181)
Interest income resulting from short-term deposits
3,791
4,360
Interest income resulting from defined benefit pension asset
926
1,164
Other interest income
650
415
Total finance income
5,367
5,939
Net finance charge
(8,418)
(5,242)
Accounting policy
All share-based payment arrangements are recognised in the consolidated financial statements in accordance with IFRS 2.
The Group operates equity-settled share-based remuneration plans for its employees. All employee services received in exchange for the grant of any share-based remuneration are measured at their fair values. These are indirectly determined by reference to the fair value (excluding the effect of non-market-based vesting conditions) of the share options awarded. Their value is determined at the date of grant and is not subsequently remeasured unless the conditions on which the award was granted are modified. The fair value at the date of the grant is calculated using the Monte Carlo option pricing model and the cost is recognised on a straight-line basis over the vesting period. Adjustments are made to reflect expected and actual forfeitures during the vesting period. For Save As You Earn (SAYE) plans, employees are required to contribute towards the plan. This non-vesting condition is taken into account in\u00a0calculating the fair value of the option at the grant date.
All share-based remuneration is ultimately recognised as an expense in the Consolidated Statement of Profit or Loss. For equity-settled share-based payments there is a corresponding credit to the share-based payment reserve.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up to the nominal value of\u00a0the shares issued are allocated to share capital, with any excess being recorded as share premium.
As at 31 December 2024 the Group maintained four (2023: four) active share-based payment schemes for employee remuneration.
Details of the share options outstanding and movement during the year are as follows:
2024
2023
Number
\u2019000
Weighted
average
exercise price
p
Number
\u2019000
Weighted
average
exercise price
p
Outstanding at 1 January
2,553
48
4,552
99
Granted
2,628
206
1,132
1
Forfeited
(130)
250
(418)
177
Exercised
(698)
37
(2,713)
94
Outstanding at 31 December
4,353
139
2,553
48
The weighted average share price at the date of exercise for share options exercised during the year was 362p. The weighted average remaining contractual life of options outstanding at 31 December 2024 was 5.9 years. At 31 December 2024, 0.3m options had vested and were still exercisable at prices between 1p and 429p.
The weighted average fair value of options granted was 168p. The fair values of executive scheme options granted, which included a\u00a0market-related performance condition, were determined using the Monte Carlo model, while those for all-employee schemes used the\u00a0Black-Scholes-Merton option pricing model. Significant inputs into the calculations included the market price at the date of grant, the\u00a0exercise price and share price volatility. Furthermore, the calculations incorporated an estimate of the future dividend yield and the risk-free interest rate. The share price volatility was determined from the daily log-normal distributions of the Company share price over a\u00a0period commensurate with the expected life as calculated back from the date of grant. The risk-free interest rate utilised the zero-coupon bond yield derived from UK Government bonds as at the date of calculation for a life commensurate with the expected life. Adjustments are made to reflect expected and actual forfeitures during the vesting period due to failure to satisfy service conditions.
There were 2.63m options granted during the year and 0.13m options that were forfeited during the year. The market price at 31\u00a0December 2024 was 362p and the range during 2024 was 310p to 394p.
All share-based employee remuneration will be settled in equity. The Group has no legal obligation to repurchase or settle the options.
The Group recognised the following expenses related to share-based payments:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Giving rise to share-based payment reserve:
All-employee schemes
416
188
Executive schemes
2,206
852
2,622
1,040
The Group is currently running four active schemes, detailed below:
Sharesave plan (All-employee scheme)
Options are available to all employees. Options are granted for a period of three years. Options are exercisable at a price based on the quoted market price of the Company\u2019s shares at the time of invitation, discounted by up to 20%. Options are forfeited if the employee leaves Mears before the options vest, which impacts the number of options expected to vest. If an employee stops saving but continues in employment this is treated as a cancellation, which results in an acceleration of the share-based payment charge.
Company Share Option Plan (Executive scheme)
The Company operates a discretionary unapproved share plan and a Company Share Option Plan. Options are exercisable at a price below market value at the date of grant and often at nominal value. The vesting period is three years. If the options remain unexercised after a period of 10 years from the date of grant, the options expire. Options are forfeited if the employee leaves Mears before the options vest. No awards to Executive Directors are proposed under these plans.
Long Term Incentive Plan (Executive scheme)
The Long Term Incentive Plan provides for awards of free shares (i.e. either conditional shares or nominal cost options), normally on an annual basis, which are eligible to vest after three years subject to continued service and the achievement of challenging performance conditions. Options are granted under this scheme to key senior management subject to performance conditions as detailed on pages 101 to 103 of the Remuneration Report.
Deferred Share Bonus Plan (Executive scheme)
The Deferred Share Bonus Plan relates to annual bonus payments where typically 33% are deferred into shares and vest subject to continued employment. Individuals may be able to receive a dividend equivalent payment on deferred bonus shares at the time of vesting equal to the value of dividends that would have accrued during the vesting period. The dividend equivalent payment may assume the reinvestment of dividends on a cumulative basis. Clawback provisions may apply for three years from the date of payment of\u00a0any bonus or the grant of any deferred bonus share award.
Further details of schemes relating to the Directors can be found in the Report of the Remuneration Committee on pages 88 to 109.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147912": { "value": "Accounting policy
Current tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities that are unpaid at the balance sheet date. They are calculated according to the tax rates and tax laws applicable to the accounting periods to which they relate, based on the taxable profit for the year.
Where an item of income or expense is recognised in the Consolidated Statement of Profit or Loss, any related tax generated is recognised as a component of tax expense in the Consolidated Statement of Profit or Loss. Where an item is recognised directly to\u00a0equity or presented within the Consolidated Statement of Comprehensive Income, any related tax generated is treated similarly.
Deferred taxation is the tax expected to be repayable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method.
Deferred taxation liabilities are generally recognised on all taxable temporary differences in full with no discounting. Deferred taxation assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability, unless the related transaction is a business combination or affects tax or accounting profit.
Deferred taxation is calculated using the tax rates and laws that are expected to apply in the period when the liability is settled or the asset is\u00a0realised, provided they are enacted or substantively enacted at the balance sheet date. The carrying value of deferred taxation assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available against which taxable temporary differences can be utilised. Deferred tax is charged or credited to either the Consolidated Statement of Profit or Loss, the Consolidated Statement of Comprehensive Income or equity to the extent that it relates to items charged or credited. Deferred tax relating to items charged or credited directly to equity is also credited or charged to equity.
Accounting policy
Goodwill arises on the acquisition of subsidiaries and represents any excess of the cost of the acquired entity over the Group\u2019s interest in the fair value of the entity\u2019s identifiable assets and liabilities acquired and is capitalised as a separate item. Goodwill is\u00a0recognised as an intangible asset.
Under the business combinations exemption of IFRS 1, goodwill previously written off directly to reserves under UK Generally Accepted Accounting Practice (GAAP) is not recycled to the Consolidated Statement of Profit or Loss on calculating a gain or loss on\u00a0disposal.
Impairment
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows: Cash-Generating Units (CGUs). Goodwill is allocated to those groups of CGUs that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group at which goodwill is monitored for internal management purposes.
Goodwill or groups of CGUs that include goodwill and those intangible assets not yet available for use are tested for impairment at least annually. All other individual assets or CGUs are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised in the Consolidated Statement of Profit or Loss for the amount by which the asset\u2019s or CGU\u2019s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use based on an internal discounted cash flow evaluation. Impairment losses recognised for groups of CGUs, to which goodwill has been allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment loss is charged pro-rata to the other assets in the group of CGUs. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.
Goodwill
arising on
consolidation
\u00a3\u2019000
Purchased
goodwill
\u00a3\u2019000
Total
\u00a3\u2019000
Gross carrying amount
At 1 January 2023, 1 January 2024 and 31 December 2024
117,826
4,042
121,868
Accumulated impairment losses
At 1 January 2023, 1 January 2024 and 31 December 2024
\u2013
\u2013
\u2013
Carrying amount
At 31 December 2024
117,826
4,042
121,868
At 31 December 2023
117,826
4,042
121,868
Goodwill on consolidation arises on the excess of cost of acquisition over the fair value of the net assets acquired on purchase of\u00a0a\u00a0company.
Purchased goodwill arises on the excess of cost of acquisition over the fair value of the net assets acquired on the purchase of the trade and assets of a business by the Group.
Goodwill is not amortised but is reviewed for impairment on an annual basis or more frequently if there are any indications that goodwill may be impaired. Goodwill acquired in a business combination is allocated to groups of CGUs according to the level at which management monitors that goodwill. Goodwill is carried at cost less accumulated impairment losses.
The carrying value of goodwill is allocated to the following groups of CGUs:
Goodwill arising
on consolidation
Purchased
goodwill
Total
2024
\u00a3\u2019000
2023
\u00a3\u2019000
2024
\u00a3\u2019000
2023
\u00a3\u2019000
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Maintenance (excluding Housing with Care)
65,290
65,290
4,042
4,042
69,332
69,332
Management
33,447
33,447
\u2013
\u2013
33,447
33,447
Housing with Care
19,089
19,089
\u2013
\u2013
19,089
19,089
117,826
117,826
4,042
4,042
121,868
121,868
The Group\u2019s cash inflows are largely independent at the individual branch level and each branch is, therefore, considered a CGU. However, the goodwill of the Group contributes to the cash inflows of multiple CGUs. It is, therefore, allocated to groups of CGUs and monitored for internal management purposes primarily at the operating segment level. The goodwill of Housing with Care is separately monitored and, therefore, allocated to a separate group of CGUs to which it relates.
An asset is impaired if the carrying value exceeds the CGU\u2019s recoverable amount, which is based on value in use. At 30 September 2024 impairment reviews were performed by comparing the carrying value with the value in use for the groups of CGUs to which goodwill has\u00a0been allocated.
The value in use for each group of CGUs is calculated from the Board-approved one-year budgeted cash flows and extrapolated cash flows for the next four years discounted at a post-tax discount rate over a five-year period with a terminal value. The impairment reviews incorporated a terminal growth assumption, which is conservative when compared with the UK long-term growth rate and the underlying demographics, which will be positive for the Group\u2019s core markets.
The estimated growth rates are based on knowledge of the relevant sector and market and represent management\u2019s base level expectations for future growth. Changes to revenue and direct costs are based on past experience and expectation of future changes within the markets of the CGUs. All CGUs have the same access to the Group\u2019s treasury function and borrowing arrangements to finance their operations.
Management considers that reasonably possible changes in these assumptions would not cause the carrying amount of a group of\u00a0CGUs to exceed its recoverable amount.
The rates used were as follows:
Post-tax
discount rate
Pre-tax
discount rate
Volume
growth rate
(years 1\u20135)
Terminal
growth
\u00a0rate
Maintenance
10.25%
13.54%
2.00%
1.79%
Management
10.25%
12.33%
2.00%
1.79%
Housing with Care
10.25%
13.55%
3.00%
1.79%
Accounting policy
In accordance with IFRS 3 (Revised) \u2018Business Combinations\u2019, an intangible asset acquired in a business combination is deemed to have a cost to the Group of its fair value at the acquisition date. The fair value of the intangible asset reflects market expectations about the probability that the future economic benefits embodied in the asset will flow to the Group. Where an intangible asset might be separable, but only together with a related tangible or intangible asset, the group of assets is recognised as a single asset separately from goodwill where the individual fair\u00a0values of the assets in the group are not reliably measurable. Intangible assets are amortised over the useful economic lives of those assets.
Development costs incurred on software development are capitalised when all the following conditions are satisfied:
Completion of the software module is technically feasible so that it will be available for use.
The Group intends to complete the development of the module and use it.
The software will be used in generating probable future economic benefits.
There are adequate technical, financial and other resources to complete the development and to use the software.
The expenditure attributable to the software during its development can be measured reliably.
Development costs not meeting the criteria for capitalisation are expensed as incurred. Careful judgement by management is applied when deciding whether the recognition requirements for development costs have been met. This is necessary as the economic success of any development is uncertain and may be subject to future technical problems at the time of recognition. Judgements are based on the information available at each balance sheet date. In addition, all internal activities related to the research and development of new software are continually monitored by management.
The cost of an internally generated intangible asset comprises all directly attributable costs necessary to create, produce and prepare the asset to be capable of operating in the manner intended by management. Directly attributable costs include employee costs incurred on software development.
Amortisation commences upon completion of the asset and is shown within other administrative expenses. Until the asset is\u00a0available for use\u00a0on completion of the project, the assets are subject to impairment testing only. Development expenditure is\u00a0amortised over the period expected to benefit.
The identifiable intangible assets and associated periods of amortisation are as follows:
Acquisition intangibles\t\u2013 over the period expected to benefit
Development expenditure\t\u2013 over the useful life of the resulting software, typically five to ten years
Software\t\u2013 20% p.a., straight line
The useful economic lives of intangible assets are reviewed annually and amended if appropriate.
Acquisition
intangibles
\u00a3\u2019000
Development
expenditure
\u00a3\u2019000
Software
\u00a3\u2019000
Total
intangibles
\u00a3\u2019000
Gross carrying amount
At 1 January 2023
4,890
23,349
6,276
34,515
Additions
\u2013
1,041
458
1,499
Disposals
\u2013
(5,996)
(4,012)
(10,008)
At 1 January 2024
4,890
18,394
2,722
26,006
Additions
\u2013
1,204
238
1,442
Disposals
\u2013
(1,443)
(344)
(1,787)
At 31 December 2024
4,890
18,155
2,616
25,661
Amortisation
At 1 January 2023
2,486
19,030
5,547
27,063
Provided in the year
244
1,415
220
1,879
Eliminated on disposal
\u2013
(5,996)
(3,986)
(9,982)
At 1 January 2024
2,730
14,449
1,781
18,960
Provided in the year
245
1,478
521
2,244
Eliminated on disposal
\u2013
(1,443)
(344)
(1,787)
At 31 December 2024
2,975
14,484
1,958
19,417
Carrying amount
At 31 December 2024
1,915
3,671
658
6,244
At 31 December 2023
2,160
3,945
941
7,046
Acquisition intangibles relate entirely to customer relationships recognised at fair value on historical acquisitions.
Development expenditure is an internally developed intangible asset and relates to the development of the Group\u2019s Housing job management system and decarbonisation assessment software.
Development expenditure is amortised over its useful economic life of either five or ten years, depending on the resulting software.
All amortisation is included within other administrative expenses.", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9151646": { "value": "Accounting policy
Items of property, plant and equipment are stated at historical cost, net of depreciation. Historical cost includes expenditure that is\u00a0directly attributable to the acquisition of the items. Subsequent costs are included in the asset\u2019s carrying amount or recognised as\u00a0a\u00a0separate asset, as\u00a0appropriate, only when it is probable that future economic benefits associated with the item will flow into the\u00a0Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Consolidated Statement of Profit or Loss during the financial period in which they are incurred.
Freehold land is not depreciated. Depreciation on other assets is calculated to write down the cost less estimated residual value over their estimated useful economic lives. The rates generally applicable are:
Freehold buildings\t\u2013 2% p.a., straight line
Leasehold improvements\t\u2013 over the period of the lease or expected useful life of the improvements if shorter, straight line
Plant and machinery\t\u2013 20% p.a., straight line
Equipment\t\u2013 20% p.a., straight line
Fixtures and fittings \u2013 50% p.a., straight line
Motor vehicles\t\u2013 20% p.a., straight line
Residual values are reviewed annually and updated if appropriate. The carrying value is reviewed for impairment in the period if events or changes in circumstances indicate the carrying value may not be recoverable. An asset\u2019s carrying value is written down immediately to its recoverable amount if the asset\u2019s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within \u201cAdministrative expenses\u201d in the Consolidated Statement of Profit or Loss.
Identifying whether there are indicators of impairment in respect of property, plant and equipment involves some judgement and a\u00a0good understanding of the drivers of value behind the asset. At each reporting period an assessment is performed in order to determine whether there are any such indicators, which involves considering the performance at both a contract and business level, and any significant changes to the markets in which we operate. This is not considered to be a critical judgement or an area of significant uncertainty.
In order to manage a significant number of short-life assets, which can be individually difficult to track, the Group\u2019s policy is to\u00a0eliminate low cost assets once they are fully depreciated.
134
Mears Group PLC\u00a0Annual Report and Accounts 2024
Strategic report
Corporate governance
Financial statements
Shareholder information
Freehold
property
\u00a3\u2019000
Leasehold
improvements
\u00a3\u2019000
Plant and
machinery
\u00a3\u2019000
Fixtures,
fittings and
equipment
\u00a3\u2019000
Motor
vehicles
\u00a3\u2019000
Total
\u00a3\u2019000
Gross carrying amount
At 1 January 2023
2,662
28,901
392
14,880
515
47,350
Additions
22,126
682
\u2013
2,893
44
25,745
Disposals
\u2013
(2,839)
(209)
(2,375)
\u2013
(5,423)
At 1 January 2024
24,788
26,744
183
15,398
559
67,672
Additions
26,413
703
15
2,680
78
29,889
Disposals
(115)
(24)
\u2013
(1,587)
(20)
(1,746)
Eliminated on expiry of useful life
\u2013
(16,437)
(94)
(6,573)
(437)
(23,541)
Disposals on sale and leaseback
(22,725)
\u2013
\u2013
\u2013
\u2013
(22,725)
At 31 December 2024
28,361
10,986
104
9,918
180
49,549
Depreciation
At 1 January 2023
115
16,041
304
10,212
490
27,162
Provided in the year
220
5,172
40
1,850
23
7,305
Eliminated on disposals
\u2013
(2,839)
(200)
(2,289)
\u2013
(5,328)
At 1 January 2024
335
18,374
144
9,773
513
29,139
Provided in the year
789
3,788
24
2,158
24
6,783
Eliminated on disposal
(4)
(10)
\u2013
(1,069)
(14)
(1,097)
Eliminated on expiry of useful life
\u2013
(16,437)
(94)
(6,573)
(437)
(23,541)
Disposal on sale and leaseback
(571)
\u2013
\u2013
\u2013
\u2013
(571)
At 31 December 2024
549
5,715
74
4,289
86
10,713
Carrying amount
At 31 December 2024
27,812
5,271
30
5,629
94
38,836
At 31 December 2023
24,453
8,370
39
5,625
46
38,533
Sale and leaseback
On 13 December 2024 the Group entered into a sale and leaseback arrangement in respect of 221 residential properties with a carrying value of \u00a322.2m that had previously been acquired on the open market. The transaction was effected through the sale of the subsidiary entity that owns the properties and at the same time, a long-term lease was put in place allowing the Group to continue to use them.
The Group received cash of \u00a316.3m, as well as a loan note from the buyer for \u00a35.3m as detailed in note 21. Additionally, the Group retained a 25% holding in the disposed entity.
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147918": { "value": "Accounting policy
Where an asset is subject to a lease, the Group recognises a right of use asset and a lease liability on the balance sheet. The right of use asset is measured at cost, which matches the initial measurement of the lease liability and any costs expected at the end of\u00a0the lease, and then depreciated on a straight-line basis over the lease term.
The lease liability is measured at the present value of the future lease payments discounted using the Group\u2019s incremental borrowing rate. Lease payments include fixed payments, variable payments based on an index and payments arising from options reasonably certain to be\u00a0exercised.
The Group has elected to account for short-term leases and leases of low value assets using the practical expedients. Instead of\u00a0recognising a\u00a0right of use asset and a lease liability, the payments in relation to these are recognised as an expense in profit or\u00a0loss on a straight-line basis over the lease term.
In the Consolidated Balance Sheet, right of use assets and lease liabilities are presented separately.
Critical judgements in applying the Group\u2019s accounting policies
The Group holds a considerable number of leases across its portfolio of residential properties, offices and vehicles. Whilst the Group endeavours to standardise the form of leases, operational demands dictate that many leases have specific wording to address particular operational needs and also to manage the associated operational and financial risks. As such, each lease requires individual assessment and the Group is required to make key judgements which include:
the identification of a lease;
assessing the right to direct the use of the underlying asset;
determining the lease term; and
an assessment as to the level of future lease payments, including fixed and variable payments.
The most typical challenges encountered and which form the key judgements are:
where the lease contains a one-way no-fault break in Mears\u2019 favour, the Group measures the obligation based on the Group\u2019s best estimate of its future intentions;
where Mears does not in practice have the right to control the use of the asset and the key decision making rights are retained by\u00a0the\u00a0supplier;
where a wider agreement for a supply of services includes a lease component which meets the definition of a lease under IFRS\u00a016; and
the assessment of the fixed lease payments where the lease obligation to the landlord is based on a pass-through arrangement in which Mears only makes lease payments to the owner to the extent that the property is occupied and to the extent that rents are received from the tenant.
Investment property
Included within right of use assets are certain properties classified as investment properties in accordance with IAS 40. These\u00a0properties are leased primarily in order to earn rentals from sub-leasing. The Group has chosen to apply the cost model to\u00a0all\u00a0investment property and, therefore, measurement is in line with IFRS 16 as described above.
Investment
property
Assets that are used directly
within the\u00a0business
Total
\u00a3\u2019000
Residential
property
\u00a3\u2019000
Residential
property
\u00a3\u2019000
Offices
\u00a3\u2019000
Motor
vehicles
\u00a3\u2019000
Gross carrying amount
At 1 January 2023
143,746
135,986
10,507
37,557
327,796
Additions*
8,816
59,148
869
10,073
78,906
Disposals
(998)
(4,877)
(992)
(2,956)
(9,823)
At 1 January 2024
151,564
190,257
10,384
44,674
396,879
Additions*
12,683
70,557
1,811
10,695
95,746
Sale and leaseback
\u2013
11,257
\u2013
\u2013
11,257
Disposals
(1,369)
(37,759)
(1,885)
(11,606)
(52,619)
At 31 December 2024
162,878
234,312
10,310
43,763
451,263
Depreciation
At 1 January 2023
32,345
60,312
5,669
16,038
114,364
Provided in the year
8,747
32,183
1,710
8,268
50,908
Impairments
6,223
\u2013
\u2013
\u2013
6,223
Eliminated on disposals
(930)
(3,960)
(992)
(2,383)
(8,265)
At 1 January 2024
46,385
88,535
6,387
21,923
163,230
Provided in the year
8,967
42,604
1,673
9,005
62,249
Impairments
633
\u2013
\u2013
\u2013
633
Eliminated on disposals
(1,298)
(32,782)
(1,885)
(11,055)
(47,020)
At 31 December 2024
54,687
98,357
6,175
19,873
179,092
Carrying amount
At 31 December 2024
108,191
135,955
4,135
23,890
272,171
At 31 December 2023
105,179
101,722
3,997
22,751
233,649
*\tAdditions includes both new underlying assets and remeasurement of the right of use asset for changes in the lease terms.
During the year, the Group entered into a sale and leaseback arrangement in respect of 221 residential properties. The transaction was effected via the disposal of Mears Property Company Limited, the subsidiary entity that had previously purchased the properties on the open market. Further details of this transaction can be found in note 13.
Investment property included above represents properties held by the Group primarily to earn rentals, rather than for use in the Group\u2019s other activities. The amount included in lease income in note 2 in respect of these properties is \u00a325.5m (2023: \u00a326.5m). Direct operating expenses of \u00a322.2m (2023: \u00a324.0m), excluding impairments, arose from investment property that generated rental income during the year. The carrying value of the right of use asset in respect of investment property is considered to be approximately equal to its fair\u00a0value.
Impairment
The Group recognised an impairment loss of \u00a36.2m in 2023 in respect of certain right of use assets classified as investment property. These property portfolios are held to collect rent income, either directly from tenants or from Local Authorities. While trading in respect of these properties remained broadly in line with expectations during 2024, the Group\u2019s impairment assessments at 31 December 2024 resulted in an additional impairment of \u00a30.6m across the portfolio.
In carrying out impairment assessments, management prepared detailed cash flow forecasts for the lives of the underlying leases on these properties and discounted them using an appropriate rate, in order to estimate the value in use. The range of discount rates used in these calculations was from 6.70% to 7.25%.
The impact of the impairments on the Consolidated Statement of Profit or Loss has been recognised within cost of sales.
137
Lease liabilities are separately presented on the face of the Consolidated Balance Sheet as shown below:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Current
66,861
54,492
Non-current
230,641
199,948
297,502
254,440
The Group had not committed to any leases which had not commenced at 31 December 2024. The majority of the Group\u2019s property leases contain variable lease payments that vary annually either by reference to an index, such as the Consumer Prices Index (CPI), or\u00a0based on market conditions each year. The potential impact of this variation depends on future events and, therefore, cannot be quantified, but the Group would typically expect commensurate adjustments to income derived from these properties.
A smaller number of property leases contain termination or extension options. Management has assessed whether it is reasonably certain that the extension or termination options will be exercised, which is then reflected in the valuation.
The Group has elected not to recognise a lease liability for short-term leases and leases of low value. Payments made under such leases are expensed on a straight-line basis. Certain leases incorporate variable lease payments that are not included in the measurement of\u00a0lease liabilities in accordance with IFRS 16. The expense relating to payments not included in the measurement of the lease liability is\u00a0as\u00a0follows:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Short-term leases
64,678
57,281
Low value leases
850
948
Variable lease payments
859
979
The portfolio of short-term leases to which the Group is committed at the end of the reporting period is not dissimilar to the portfolio to\u00a0which the above disclosure relates.
143
Other disclosures relating to lease liabilities are provided in the table below:
Note
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Depreciation of right of use assets
14
62,249
50,908
Impairment of right of use assets
14
633
6,223
Additions to right of use assets arising from new leases or modifications
14
95,746
78,906
Additions to right of use assets arising from sale and leaseback
14
11,257
\u2013
Carrying value of right of use assets at the year end
14
272,171
233,649
Interest on lease liabilities during the year
5
12,698
9,899
Total cash outflow in respect of leases during the year
24
70,605
58,048
Accounting policy
Investments include those over which the Group has significant influence but which it does not control. These are categorised as associates. It\u00a0is presumed that the Group has significant influence where it has between 20% and 50% of the voting rights in the investee unless indicated otherwise. The Group also holds investments in joint ventures where the Group and other parties have joint control over their activities.
The basis by which associates and joint ventures are consolidated in the Group financial statements is through the equity method, as outlined in the basis of consolidation.
In addition to associates and joint ventures, the Group holds investments in entities over which it does not exert significant influence. These are accounted for at fair value through profit or loss.
Associates
\u00a3\u2019000
Other
investments
\u00a3\u2019000
Total
\u00a3\u2019000
At 1 January 2023
1,206
65
1,271
Share of profit
486
\u2013
486
Distributions received
(1,135)
\u2013
(1,135)
At 1 January 2024
557
65
622
Share of profit
1,014
\u2013
1,014
Increase in fair value
\u2013
785
785
Distributions received
(147)
\u2013
(147)
At 31 December 2024
1,424
850
2,274
Other investments represents the Group\u2019s 6.16% holding in Mason Topco Limited, which is mandatorily held at fair value through profit or loss. During the year, management reassessed the fair value of this holding, increasing it by \u00a30.8m (2023: \u00a3nil). This increase in fair value was recognised in administrative expenses in the Consolidated Statement of Profit or Loss.
Mason Topco Limited is an unquoted holding company that owns Terraquest Solutions Limited, following the disposal of that business by\u00a0the Group in 2020. The fair value was assessed based on the latest available financial information in respect of the business, as well as several assumptions, including an estimate of the price/earnings (P/E) ratio that might be achieved, based on the original transaction (7.7x) and reflecting a suitable discount for lack of control and marketability (58%).
If the P/E ratio had been higher or lower by 1.0x or the discount for lack of control and marketability had been 20 percentage points lower or higher, the fair value would have been \u00a30.4m higher or lower, respectively.
Associates
Set out below is the investment in an associate as at 31 December 2024, which in management\u2019s opinion is significant to the Group:
Carrying value
Nature of
relationship
Proportion
held
Country of
registration
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Pyramid Plus South LLP
Associate
30%
United
Kingdom
1,424
557
MPC 1 Holdco Limited
Associate
25%
United
Kingdom
\u2013
\u2013
Pyramid Plus South LLP is a repairs and maintenance service provider that is central to one of the Group\u2019s contracts. The Group\u2019s client for the contract holds the remaining 70% interest in the entity.
Associates\u00a0continued
During the year, the Group received distributions of \u00a30.1m (2023: \u00a31.1m) from Pyramid Plus South LLP. Summarised financial information for Pyramid Plus South LLP for the year is shown below:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Revenue and profits
Revenue
44,406
24,802
Expenses
(41,025)
(23,183)
Profit for the year
3,381
1,619
Other comprehensive income
\u2013
\u2013
Total comprehensive income
3,381
1,619
Share of profit at 30%
1,014
486
Net assets
Non-current assets
\u2013
\u2013
Current assets
12,071
7,497
Current liabilities
(7,323)
(4,666)
Non-current liabilities
\u2013
\u2013
Total assets less total liabilities
4,748
2,831
Cash and cash equivalents of \u00a33.2m (2023: \u00a31.9m) were included in current assets above.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147922": { "value": "The subsidiary undertakings within the Group at 31 December 2024 are shown below:
Proportion held
Country of registration
Nature of business
Heather Housing Limited*
100%
United Kingdom
Housing provision
Helcim Group Limited
100%
United Kingdom
Dormant
Helcim Homes Limited
100%
United Kingdom
Dormant
IRT Surveys Limited
100%
United Kingdom
Housing technology provider
Let to Birmingham Limited
100%
United Kingdom
Dormant
Manchester Working Limited
80%
United Kingdom
Housing services
Mears Energy Limited
100%
United Kingdom
Dormant
Mears Estates Limited
100%
United Kingdom
Grounds maintenance
Mears Extra Care Limited*
100%
United Kingdom
Provision of care
Mears Facility Management Limited*
100%
United Kingdom
Dormant
Mears Home Improvement Limited
100%
United Kingdom
Dormant
Mears Homes Limited
100%
United Kingdom
Dormant
Mears Housing Management Limited
100%
United Kingdom
Housing management services
Mears Housing Management (Holdings) Limited*
100%
United Kingdom
Intermediate holding company
Mears Housing Portfolio (Holdings) Limited
100%
United Kingdom
Intermediate holding company
Mears Housing Portfolio 4 Limited
100%
United Kingdom
Dormant
Mears Insurance Company Limited*
99.99%
Guernsey
Insurance services
Mears Learning Limited
90%
United Kingdom
Dormant
Mears Limited*
100%
United Kingdom
Housing services
Mears New Homes Limited
100%
United Kingdom
Housebuilding
Mears Property Company 2 Limited
100%
United Kingdom
Property acquisition
Mears Property Company 3 Limited
100%
United Kingdom
Property acquisition
Mears Scotland (Housing) Limited
100%
United Kingdom
Dormant
Mears Scotland LLP
66.67%
United Kingdom
Housing services
Mears Social Housing Limited
100%
United Kingdom
Dormant
Mears Supported Living Limited*
100%
United Kingdom
Provision of care
Mears Wales Limited
100%
United Kingdom
Dormant
MHM Property Services Limited
100%
United Kingdom
Maintenance services
Morrison Facilities Services Limited*
100%
United Kingdom
Proportion held
Country of registration
Nature of business
MPM Housing Limited
100%
United Kingdom
Dormant
MPS Housing Limited
100%
United Kingdom
Housing services
O&T Developments Limited
100%
United Kingdom
Housing management services
Omega Housing Limited
100%
United Kingdom
Housing registered provider
Plexus UK (First Project) Limited
100%
United Kingdom
Housing registered provider
RepairMyHome C.I.C.
100%
United Kingdom
Online marketplace for housing maintenance
Scion Group Limited*
100%
United Kingdom
Dormant
Scion Property Services Limited
100%
United Kingdom
Dormant
Scion Technical Services Limited
100%
United Kingdom
Maintenance services
Tando Homes Limited
100%
United Kingdom
Housing management services
Tando Property Services Limited
100%
United Kingdom
Housing management services
*\tHeld directly by Mears Group PLC.
All subsidiary undertakings prepare financial statements to 31 December.
The Group includes the following three subsidiaries with non-controlling interests: Manchester Working Limited, Mears Learning Limited and Mears Scotland LLP. The table below sets out selected financial information in respect of those subsidiaries:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Revenue and profits
Revenue
34,091
64,513
Expenses and taxation
(32,540)
(60,337)
Profit for the year
1,551
4,176
Other comprehensive expense
\u2013
\u2013
Total comprehensive income
1,551
4,176
Profit for the year allocated to non-controlling interests
410
1,456
Total comprehensive income allocated to non-controlling interests
410
\u2013
Net assets
Non-current assets
24
65
Current assets
11,420
20,710
Current liabilities
(1,056)
(10,668)
Non-current liabilities
(365)
(1,232)
Total assets less total liabilities
10,023
8,875
Equity attributable to shareholders of Mears Group PLC
6,665
5,927
Non-controlling interests
3,358
2,948
Total equity
10,023
8,875
The following UK subsidiaries will take advantage of the audit exemption set out within Section 479A of the Companies Act 2006 for the year ended 31 December 2024:
Registration
number
Heather Housing Limited
07713632
Helcim Group Limited
07526612
IRT Surveys Limited
SC227199
Mears Estates Limited
03720903
Mears Extra Care Limited
03689426
Mears Home Improvement Limited
03716517
Mears Housing Management Limited
03662604
Mears Housing Management (Holdings) Limited
04726480
Mears New Homes Limited
08780839
Mears Property Company 2 Limited
SC750308
Mears Property Company 3 Limited
15470336
Mears Supported Living Limited
SC662805
Morrison Facilities Services Limited
SC120550
MPS Housing Limited
11655167
O&T Developments Limited
05692853
RepairMyHome C.I.C.
15087336
Scion Group Limited
03905442
Scion Technical Services Limited
03671450
Tando Homes Limited
09260353
Tando Property Services Limited
07405761
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Materials and consumables
1,173
1,463
The Group consumed inventories totalling \u00a381.8m during the year (2023: \u00a386.3m). No items are being carried at fair value less costs to\u00a0sell\u00a0(2023: \u00a3nil).
", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9151648": { "value": "Accounting policy
Trade receivables represent amounts due from customers in respect of invoices raised. They are initially measured at their transaction price and subsequently remeasured at amortised cost less loss allowance.
Retention assets represent amounts held by customers for a period following payment of invoices, to cover any potential defects in\u00a0the work. Retention assets are included in trade receivables and are, therefore, initially measured at their transaction price.
Contract assets represent revenue recognised in excess of the total of payments on account and amounts invoiced.
Critical judgements and key sources of estimation uncertainty
The estimation techniques used for revenue in respect of contracting require judgements to be made about the stage of completion of certain contracts and the recovery of contract assets. Each contract is treated on its merits and subject to a regular review of the revenue and costs to complete that contract. Contract assets represent revenue recognised in excess of the total of payments on account and amounts invoiced.
However, due to the estimation uncertainty across numerous contracts each with different characteristics, it is not practical to provide a quantitative analysis of the aggregated judgements that are applied, and management does not believe that disclosing a\u00a0potential range of outcomes on a consolidated basis would provide meaningful information to a reader of the financial statements.
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Current assets
Trade receivables
20,940
23,230
Contract assets
84,335
79,703
Contract fulfilment costs
148
768
Prepayments and accrued income
24,468
18,929
Other debtors
3,314
4,060
Total trade and other receivables
133,205
126,690
Included in trade receivables is \u00a32.7m (2023: \u00a33.4m) in respect of retention payments due in more than one year.
Trade receivables are normally due within 30 to 60 days and do not bear any effective interest rate. All trade receivables and accrued income are subject to credit risk exposure.
The maximum exposure to credit risk in relation to trade receivables and accrued income at the balance sheet date is the fair value of\u00a0trade receivables and accrued income. The Group\u2019s customers are primarily a mix of Local and Central Government and Housing Associations where credit risk is minimal. The Group\u2019s customer base is large and unrelated and, accordingly, the Group does not have a\u00a0significant concentration of credit risk with any one counterparty.
The amounts presented in the balance sheet in relation to the Group\u2019s trade receivables and accrued income balances are presented net of\u00a0loss allowances. The Group measures loss allowances at an amount equal to lifetime expected credit losses using both quantitative and qualitative information and analysis based on the Group\u2019s historical experience.
The ageing analysis of trade receivables is as follows:
2024
2023
Gross
amount due
\u00a3\u2019000
Expected
credit loss
\u00a3\u2019000
Carrying
value
\u00a3\u2019000
Gross
amount due
\u00a3\u2019000
Expected
credit loss
\u00a3\u2019000
Carrying
value
\u00a3\u2019000
Not past due
18,378
(181)
18,197
20,110
(158)
19,952
Less than three months past due
3,032
(637)
2,395
2,168
(627)
1,541
More than three months past due
1,979
(1,631)
348
2,674
(937)
1,737
Total trade receivables
23,389
(2,449)
20,940
24,952
(1,722)
23,230
Expected credit losses relate to individual tenant customers and are calculated based on the Group\u2019s historical experience of default by\u00a0applying a percentage based on the age of the customer\u2019s balance. Any remaining uncollected debt is written off once the tenant has\u00a0left the property and a significant period of time has elapsed, at which point the likelihood of recovery is negligible.
Expected credit losses in respect of the majority of the Group\u2019s customers are rare, as Housing Associations, Local Authorities and Central Government do not typically default on debts. Where exceptional circumstances require an expected credit loss provision in\u00a0respect of these customer types, they are assessed individually based on all the relevant facts.
The movement in expected credit loss during the year is shown below:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
At 1 January
1,722
2,175
Changes in amounts provided
727
1,482
Amounts utilised
\u2013
(1,935)
At 31 December
2,449
1,722
The movement in contract assets during the year is shown below:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
At 1 January
79,703
84,797
Recognised on completion of performance obligations
1,093,075
1,050,778
Invoiced during the year
(1,088,443)
(1,055,872)
At 31 December
84,335
79,703
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Trade payables
51,723
58,651
Accruals
48,355
50,032
Social security and other taxes
27,734
22,203
Contract liabilities
61,976
50,606
Other creditors
2,490
5,543
192,278
187,035
Due to the short duration of trade payables, management considers the carrying amounts recognised in the Consolidated Balance Sheet to be a reasonable approximation of their fair value.
The movement in contract liabilities during the year is shown below:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
At 1 January
50,606
36,351
Revenue recognised in respect of contract liabilities
(13,936)
(12,015)
Payments received in advance of performance obligations being completed
18,554
16,834
Paid in respect of gainshare agreements
(4,473)
(5,505)
Movements in estimated gainshare amounts due
11,225
14,941
At 31 December
61,976
50,606
Critical judgements and key sources of estimation uncertainty
By definition, provisions require estimates to be made of future outcomes and the eventual outflow may differ significantly from the\u00a0amount recognised at the end of the year. Management has estimated provisions based on all relevant information available to\u00a0it. For individually material provisions further information has been provided on the maximum likely outflow, in addition to the best\u00a0estimate.
The carrying value of each class of provisions is shown below:
2024
2023
Current
\u00a3\u2019000
Non-current
\u00a3\u2019000
Total
\u00a3\u2019000
Current
\u00a3\u2019000
Non-current
\u00a3\u2019000
Total
\u00a3\u2019000
Onerous contract provisions
794
7,408
8,202
1,898
6,886
8,784
Property provisions
849
993
1,842
520
761
1,281
Insurance provisions
2,774
1,364
4,138
2,623
1,388
4,011
Legal and other provisions
6,400
\u2013
6,400
3,365
750
4,115
Total provisions
10,817
9,765
20,582
8,406
9,785
18,191
A summary of the movement in provisions during the year is shown below:
Onerous
contract
provisions
\u00a3\u2019000
Property
provisions
\u00a3\u2019000
Insurance
provisions
\u00a3\u2019000
Legal
and other
provisions
\u00a3\u2019000
Total
\u00a3\u2019000
At 1 January 2024
8,784
1,281
4,011
4,115
18,191
Provided during the year
2,800
605
2,320
4,960
10,685
Utilised during the year
(2,355)
\u2013
(2,193)
(2,507)
(7,055)
Unused amounts reversed
(1,027)
(44)
\u2013
(168)
(1,239)
At 31 December 2024
8,202
1,842
4,138
6,400
20,582
Onerous contract provisions
The Group has identified a small number of contracts, with remaining terms ranging from 2 years to 32 years, under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefit expected to be received under it. These unavoidable costs are the lower of the cost of fulfilling the contract and any compensation or penalties of exiting from the\u00a0contract.
The largest single component within onerous contract provisions is \u00a36.8m relating to a single Community Housing contract which is\u00a0reported within the Management segment. The remaining balance of \u00a31.4m relates to the Maintenance segment.
In identifying the excess of costs over expected economic benefits, the Group has prepared cash flow forecasts for the lifetime of each contract, based on management\u2019s best estimates. For contracts where the time value of money is material, these cash flow forecasts have then been discounted using an appropriate discount rate.
Recognising that by their nature there is variability in future-looking cash flow forecasts, an appropriate risk factor has been applied when selecting the discount rates, resulting in rates that are lower than the risk-free rate. The range of discount rates used is between 1.45% and 1.64%, depending on the relative uncertainty of the cash flows.
If the discount rates used were 0.5 percentage points higher in each case, the onerous contract provision would have been \u00a30.5m lower.
The provisions recognised are also sensitive to the underlying cash flow forecasts. If the anticipated annual net cash outflow, ranging from \u00a30.3m to \u00a31.0m across the different contracts and forecast years, was 10% lower, the onerous contract provision would have been \u00a30.8m lower.
Property provisions
Property provisions represent the expected costs of reinstating several office properties to their original condition upon termination of\u00a0the lease.
Insurance provisions
The Group self-insures certain fleet and liability risks. Provisions for claims are recognised in respect of both claims received but not concluded, which are expected to be settled within one year, and claims incurred but not received, which are treated as non-current. The value of these provisions is estimated based on past experience of claims.
Legal and other provisions
Legal and other provisions primarily relate to previously completed customer contracts where management is aware of probable liabilities and future losses associated with work defects. This also includes other supply chain claims.
The closing provision includes one customer-related defects claim which is the subject of active litigation, against which management has provided \u00a34.7m (2023: \u00a31.6m) against a total claim value of \u00a38.9m. Management has engaged a technical expert to provide an assessment of the alternative repair options together with the expected cost of a replacement system, net of a reduction to reflect betterment. The Directors believe that this provision represents the best estimate of the likely outcome. The increase in the provision during the period reflects the Directors\u2019 latest assessment that the most likely resolution will require a full reinstatement as opposed to\u00a0an alternative partial \u201dpatch\u201d repair.
A separate supply chain claim relating to the value of works delivered is\u00a0the\u00a0subject of litigation, against which management has provided \u00a30.9m (2023: \u00a30.5m) against a claim value of \u00a35.1m, much of which is considered to\u00a0be without merit and liability denied.
The remaining claims account for a provision of \u00a30.8m, but the range of possible outcomes is narrow and any risk to the downside is\u00a0not\u00a0material.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147928": { "value": "Accounting policy
The Group uses a limited number of financial instruments comprising cash and liquid resources, borrowings and various items such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is\u00a0to\u00a0finance the Group\u2019s operations. The Group seeks to finance its operations through a combination of retained earnings and borrowings and investing surplus cash on deposit. The Group uses financial instruments to manage the interest rate risks arising from its operations and sources of finance but has no interest in the trade of financial instruments.
Financial assets and liabilities are recognised in the Consolidated Balance Sheet when the Group becomes party to the contractual provisions of the instrument. The principal financial assets and liabilities of the Group are as follows:
Financial assets
Investments in unlisted equities that do not convey control or significant influence over the underlying entity are recognised at fair value. They are subsequently remeasured at fair value with any changes being recognised in the Consolidated Statement of Profit or Loss.
Contingent consideration is held by the Group in order to collect the associated cash flows but until the amount is determined, these are not solely payments of principal and interest and, therefore, these assets are measured both initially and subsequently at\u00a0fair value, with any changes being recognised in the Consolidated Statement of Profit or Loss.
Loan notes and other non-current debtors are held by the Group in order to collect the associated cash flows and not for trading. They are, therefore, initially recognised at fair value and subsequently measured at amortised cost, less any provision for\u00a0impairment.
Financial assets generated from goods or services transferred to customers are presented as either trade receivables or contract assets. All of the Group\u2019s trade receivables are short term in nature, with payments typically due within 60 days of the works being performed. The Group\u2019s contracts with its customers, therefore, contain no significant financing component.
Mears recognises a loss allowance for expected credit losses on financial assets subsequently measured at amortised cost using the \u201csimplified approach\u201d. Individually significant balances are reviewed separately for impairment based on the credit terms agreed with the customer. Other balances are grouped into credit risk categories and reviewed in aggregate.
Trade receivables and cash at bank and in hand are non-derivative financial assets with fixed or determinable payments that are not\u00a0quoted in\u00a0an active market. Trade receivables are initially recorded at fair value net of transaction costs, being invoiced value less any provisional estimate for impairment should this be necessary due to a loss event. Trade receivables are subsequently remeasured at invoiced value, less an updated provision for impairment. Any change in their value through impairment or reversal of\u00a0impairment is recognised in the Consolidated Statement of Profit or Loss.
Cash and cash equivalents include cash at bank and in hand and bank deposits available at short notice that are subject to an insignificant risk of changes in value. Bank overdrafts are presented as current liabilities in the Consolidated Balance Sheet but are\u00a0included within cash and cash equivalents within the Consolidated Cash Flow Statement, as they are used as part of the Group\u2019s cash management process and regularly repaid. The Group also considers its revolving credit facility to be an integral part of its cash management, although this facility has not been utilised during 2023 or 2024.
Following initial recognition, financial assets are subsequently remeasured at amortised cost using the effective interest rate method.
Financial liabilities
The Group\u2019s financial liabilities are trade payables, lease liabilities, deferred and contingent consideration and other creditors. They\u00a0are included in the Consolidated Balance Sheet line items \u201cTrade and other payables\u201d, \u201cLease liabilities\u201d and \u201cOther non-current\u00a0liabilities\u201d.
Bank and other borrowings are initially recognised at fair value net of transaction costs. Gains and losses arising on the repurchase, settlement or cancellation of liabilities are recognised respectively in \u201cFinance income\u201d and \u201cFinance costs\u201d. Borrowing costs are recognised as an expense in the period in which they are incurred with the exception of those which are directly attributable to the\u00a0construction of a qualifying asset, which are capitalised as part of that asset.
Trade payables on normal terms are not interest bearing and are stated at their fair value on initial recognition and subsequently at\u00a0amortised cost.
146
21. Financial instruments\u00a0continued
Categories of financial instruments
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Non-current assets
Fair value (level 3)
Investments \u2013 other investments
850
65
Amortised cost
Loan notes and other non-current receivables
10,195
4,458
Current assets
Amortised cost
Trade receivables
20,940
23,230
Other debtors
3,314
4,060
Short-term financial assets
\u2013
7,090
Cash and cash equivalents
91,404
138,756
115,658
173,136
Non-current liabilities
Amortised cost
Lease liabilities
(230,641)
(199,948)
Current liabilities
Fair value (level 3)
Contingent consideration
\u2013
(581)
Amortised cost
Overdrafts and other short-term borrowings
\u2013
(36,699)
Trade payables
(51,723)
(58,651)
Lease liabilities
(66,861)
(54,492)
Other creditors
(2,490)
(4,710)
Deferred consideration
\u2013
(252)
(121,074)
(154,804)
(225,012)
(177,674)
The amount recognised as an allowance for expected credit losses on trade receivables during 2024 was \u00a30.7m (2023: \u00a31.5m).
The IFRS 13 hierarchy level categorisation relates to the extent the fair value can be determined by reference to comparable market values. The classifications range from level 1, where instruments are quoted on an active market, through to level 3, where the assumptions used to\u00a0arrive at fair value do not have comparable market data.
The fair values of investments in unlisted equity instruments are determined by reference to an assessment of the fair value of the entity to\u00a0which they relate. This is typically based on a multiple of earnings of the underlying business.
There have been no transfers between levels during the year.
Fair value information
The fair value of the Group\u2019s financial assets and liabilities approximates to the book value as disclosed above.
Financial risk management
The Group\u2019s activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk); credit risk; and liquidity risk. The main risks faced by the Group relate to the availability of funds to meet business needs and the risk of credit default by\u00a0customers. The Group\u2019s overall risk management programme focuses on the unpredictability of financial markets and seeks to\u00a0minimise potential adverse effects on the Group\u2019s financial performance.
Risk management is carried out under policies and guidelines approved by the Board of Directors.
21. Financial instruments\u00a0continued
Borrowing facilities
The Group\u2019s borrowing facilities are drawn on as required to manage its cash needs. Banking facilities are reviewed regularly and extended and replaced in advance of their expiry.
The Group had a revolving credit facility of \u00a370.0m with Barclays Bank PLC, HSBC Bank PLC and Citi. In order to assist with short-term day-to-day treasury requirements, this facility includes an overdraft carve out with Barclays Bank PLC of \u00a310m.
The Group pays a margin over and above SONIA on bank borrowings when it uses its facility. The margin is based on the ratio of Group consolidated net borrowings to Group consolidated adjusted EBITDA and could have varied between 1.75% and 2.75% during the year.
Details of the Group\u2019s banking covenants are provided on page 54.
Overdrafts and other short-term borrowings
At 31 December 2024, the Group had overdrafts of \u00a3nil (2023: \u00a325.5m) and other credit facilities of \u00a3nil (2023: \u00a311.2m). Overdrafts were utilised alongside highly liquid cash equivalents, such as money market facilities, for the purposes of cash management during the year. For the purpose of the Consolidated Cash Flow Statement overdraft facilities have been included within cash and cash equivalents.
Other credit facilities are short-term borrowings due within no more than 60 days and are also used as part of the Group\u2019s cash management process.
Interest rate risk management
The Group finances its operations through a mixture of retained profits and bank borrowings from major banking institutions at floating rates of\u00a0interest based on SONIA.
The Group\u2019s policy is to accept a degree of interest rate risk, provided the effects of the various potential changes in rates remain within certain\u00a0prescribed parameters.
At 31 December 2024, the Group had minimal exposure to interest rate risk relating to borrowing costs.
Liquidity risk management
The Group seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely\u00a0and profitably.
Management monitors rolling forecasts of the Group\u2019s liquidity reserve (comprising undrawn borrowing facilities and cash and cash equivalents) on the basis of expected cash flows. This is carried out centrally for the Group as a whole in accordance with internal practice and limits.
The quantum of committed borrowing facilities of the Group is regularly reviewed and is designed to exceed forecast peak gross debt levels. For short-term working capital purposes, the Group utilises bank overdrafts as required. These facilities are regularly reviewed and are renegotiated ahead of their expiry date.
The table below shows the undiscounted maturity profile of the Group\u2019s financial liabilities:
Within 1 year
\u00a3\u2019000
1\u20132 years
\u00a3\u2019000
2\u20135 years
\u00a3\u2019000
Over 5 years
\u00a3\u2019000
Total
\u00a3\u2019000
2024
Non-derivative financial liabilities
Overdrafts and other short-term borrowings
\u2013
\u2013
\u2013
\u2013
\u2013
Trade payables
51,723
\u2013
\u2013
\u2013
51,723
Lease liabilities
70,229
61,906
109,019
104,224
345,378
Other creditors
2,490
\u2013
\u2013
\u2013
2,490
Deferred and contingent consideration
\u2013
\u2013
\u2013
\u2013
\u2013
2023
Non-derivative financial liabilities
Overdrafts and other short-term borrowings
36,699
\u2013
\u2013
\u2013
36,699
Trade payables
58,651
\u2013
\u2013
\u2013
58,651
Lease liabilities
58,492
44,707
88,428
114,418
306,045
Other creditors
4,710
\u2013
\u2013
\u2013
4,710
Deferred and contingent consideration
833
\u2013
\u2013
\u2013
833
21. Financial instruments\u00a0continued
Credit risk management
The Group\u2019s credit risk is primarily attributable to its trade receivables, contract assets and work in progress.
Trade receivables are normally due within 30 to 60 days. Trade and other receivables included in the Consolidated Balance Sheet are stated net of an expected credit loss provision which has been estimated by management following a review of individual receivable accounts. There is no Group-wide rate of provision and provision made for debts that are overdue is based on prior default experience and known factors at the balance sheet date. Receivables are written off against the expected credit loss provision when management considers that the debt is no longer recoverable.
Housing customers are typically Local and Central Government and Housing Associations. The nature of these customers means that credit risk is minimal. Other trade receivables contain no specific concentration of credit risk as the amounts recognised represent a\u00a0large number of\u00a0receivables from various customers.
The Group continually monitors the position of major customers and incorporates this information into its credit risk controls. External credit ratings are obtained where appropriate.
Details of the ageing of trade receivables are shown in note 17.
Loan notes receivable
Loan notes with a carrying value of \u00a34.7m (2023: \u00a34.2m) included within non-current assets were received as part of the disposal of the Terraquest Group. They are repayable in\u00a0December 2028 and accrue interest at 10% per annum.
During the year, the Group entered into a sale and leaseback transaction as detailed in note 13. As part of this transaction, the Group received loan notes with a carrying value of \u00a35.3m, which are also included within non-current assets. Interest is payable monthly at 5% per annum on the balance outstanding and the loan notes are repayable in 2039 or on the event of a further sale of the properties by the buyer.
Short-term financial assets
Short-term financial assets are fixed-term deposits with financial institutions held for investment purposes rather than for cash management. All short-term financial assets have a maturity at inception of 12 months or less and are held for the purpose of generating returns.
Deferred and contingent consideration payable
The table below shows the movements in deferred and contingent consideration payable:
Deferred
\u00a3\u2019000
Contingent
\u00a3\u2019000
Total
\u00a3\u2019000
At 1 January 2023
496
438
934
Unwinding of discount on deferred consideration
16
\u2013
16
Movement in fair value of contingent consideration
\u2013
143
143
Paid during the year
(260)
\u2013
(260)
At 1 January 2024
252
581
833
Unwinding of discount on deferred consideration
8
\u2013
8
Movement in fair value of contingent consideration
\u2013
19
19
Paid during the year
(260)
(600)
(860)
At 31 December 2024
\u2013
\u2013
\u2013
Deferred consideration payable is initially measured at fair value by discounting the contractual amount due using a discount rate based on the assessed cost of debt for the Group. It is subsequently measured at amortised cost.
Contingent consideration payable is measured at fair value based on management\u2019s expectation of the amount that will be payable. This\u00a0figure is then discounted at an appropriate rate.
Capital management
The Group\u2019s objectives when managing capital are:
to safeguard the Group\u2019s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for\u00a0other stakeholders;
to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk; and
to maintain an optimal capital structure to reduce the cost of capital.
149
21. Financial instruments\u00a0continued
Capital management\u00a0continued
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in light\u00a0of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or\u00a0sell\u00a0assets to reduce debt", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147930": { "value": "24.22. Deferred taxation
Deferred tax is calculated on temporary differences under the liability method.
Deferred tax relates to the following:
Consolidated
Balance Sheet
Consolidated Statement
of Profit or Loss
Other movements
At
31 December
2024
\u00a3\u2019000
At
31 December
2023
\u00a3\u2019000
2024
\u00a3\u2019000
2023
\u00a3\u2019000
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Pension schemes
(5,655)
(4,799)
(319)
(481)
(537)
1,482
Share-based payments
1,320
698
466
118
156
(124)
Tax losses
274
\u2013
274
\u2013
\u2013
\u2013
Acquisition intangibles
(479)
(540)
61
61
\u2013
\u2013
Capital allowances
423
1,295
(872)
978
\u2013
\u2013
Leases
513
569
(56)
(56)
\u2013
\u2013
Fair value of software development
(114)
(128)
14
15
\u2013
\u2013
Other timing differences
200
\u2013
200
\u2013
\u2013
\u2013
(3,518)
(2,905)
(232)
635
(381)
1,358
Other movements are recognised in the Consolidated Statement of Comprehensive Income in respect of pension schemes and in the Consolidated Statement of Changes in Equity in respect of share-based payments.
In accordance with IFRS 2 \u2018Share-based Payment\u2019, the Group has recognised an expense for the consumption of employee services received as consideration for share options granted. A tax deduction will not arise until the options are exercised. The tax deduction in\u00a0future periods is dependent on the Company\u2019s share price at the date of exercise. The estimated future tax deduction is based on the\u00a0options\u2019 intrinsic value at the balance sheet date.
The cumulative amount credited to the Consolidated Statement of Profit or Loss is limited to the tax effect of the associated cumulative share-based payment expense. The excess has been credited directly to equity. This is presented in the Consolidated Statement of\u00a0Comprehensive Income.
In addition to those recognised, unused tax losses totalling \u00a30.3m (2023: \u00a31.4m) have not been recognised as management does not\u00a0consider that it is probable that they will be recovered.
Intangible assets acquired as part of a business combination are capitalised at fair value at the date of the acquisition and amortised over their useful economic lives. The UK tax regime calculates tax using the individual financial statements of the members of the Group and not the consolidated financial statements. Hence, the tax base of acquisition intangible assets arising on consolidation is \u00a3nil. The estimated tax effect of this \u00a3nil tax base is accounted for as a deferred tax liability which is released over the period of amortisation of the associated acquisition intangible asset.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147931": { "value": "23. Share capital and reserves
Classes of reserves
Share capital represents the nominal value of shares that have been issued. Mears Group PLC does not have a limited amount of\u00a0authorised shares.
Share premium represents the difference between the nominal value of shares issued and the total consideration received.
Treasury shares are equity instruments of the Group that have been reacquired. They are recognised at cost and deducted from equity as\u00a0a\u00a0separate reserve.
The share-based payment reserve represents employee remuneration which is credited to the share-based payment reserve until the\u00a0related share options are exercised or otherwise extinguished. Upon exercise or derecognition of the option, the share-based payment reserve is transferred to retained earnings.
The merger reserve relates to the difference between the nominal value and total consideration in respect of acquisitions, where the\u00a0Company was entitled to the merger relief offered by the Companies Act 2006.
Share capital
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Allotted, called up and fully paid
At 1 January: 101,551,082 (2023: 111,000,889) ordinary shares of 1p each
1,016
1,110
Issue of 153,880 (2023: 2,713,031) shares on exercise of share options
2
27
Cancellation of 10,940,518 (2023: 12,162,838) shares following share buybacks
(110)
(121)
At 31 December: 90,764,444 (2023: 101,551,082) ordinary shares of 1p each
908
1,016
During the year 153,880 (2023: 2,713,031) ordinary 1p shares were issued in respect of share options exercised. In addition, 10,940,518 (2023: 12,162,838) shares were repurchased by the Group and cancelled at a cost of \u00a340.3m (2023: \u00a333.2m).
Share premium
\u00a3\u2019000
At 1 January 2023
82,351
Issue of shares on exercise of share options
2,530
Capital reduction
(82,549)
At 1 January 2024
2,332
Issue of shares on exercise of share options
249
At 31 December 2024
2,581
Treasury shares
Thousands
\u00a3\u2019000
At 1 January 2024
1,891
5,122
Acquired during the year
3,169
11,733
Distributed to satisfy the exercise of share options during the year
(599)
(1,870)
At 31 December 2024
4,461
14,985
24. Notes to the Consolidated Cash Flow Statement
The following non-operating cash flow adjustments have been made to the profit for the year before tax:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Depreciation
69,032
58,213
Impairment of right of use assets
633
6,223
Loss/(profit) on disposal of assets
358
(101)
Loss on sale and leaseback transaction
283
\u2013
Amortisation
2,244
1,879
Share-based payments
2,622
1,040
IAS 19 pension movement
(544)
(758)
Movement in fair value of investments
(785)
\u2013
Share of profits of associates
(1,014)
(486)
Finance income
(5,367)
(5,939)
Finance cost
13,785
11,182
Total
81,247
71,253
Movements in financing liabilities during the year are as follows:
Revolving
credit facility
\u00a3\u2019000
Other credit
facilities
\u00a3\u2019000
Lease
liabilities
\u00a3\u2019000
Total
\u00a3\u2019000
At 1 January 2023
\u2013
\u2013
225,421
225,421
Inception of new leases*
\u2013
\u2013
78,907
78,907
Termination of leases
\u2013
\u2013
(1,739)
(1,739)
Increase in facility
\u2013
11,244
\u2013
11,244
Interest
502
\u2013
9,899
10,401
Arrangement fees
38
\u2013
\u2013
38
Cash outflows including in respect of capital and interest
(540)
\u2013
(58,048)
(58,588)
At 1 January 2024
\u2013
11,244
254,440
265,684
Inception of new leases*
\u2013
\u2013
95,746
95,746
Sale and leaseback
\u2013
\u2013
10,971
10,971
Termination of leases
\u2013
\u2013
(5,748)
(5,748)
Interest
440
\u2013
12,698
13,138
Arrangement fees
31
\u2013
\u2013
31
Cash outflows including in respect of capital and interest
(471)
(11,244)
(70,605)
(82,320)
At 31 December 2024
\u2013
\u2013
297,502
297,502
*\tIncluding modifications to existing leases resulting in a change in lease liabilities.
Cash outflows in respect of lease liabilities include \u00a312.7m (2023: \u00a39.9m) in respect of interest paid and \u00a357.9m (2023: \u00a348.1m) in respect of discharge of the underlying lease liabilities.
Other credit facilities are financial liabilities arising from banking arrangements used to pay certain suppliers.
For the purpose of the Consolidated Cash Flow Statement, cash and cash equivalents comprise the following at 31 December:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Bank and cash
85,404
2,755
Readily available deposits
6,000
136,000
91,404
138,755
Bank overdrafts
\u2013
(25,454)
Cash and cash equivalents
91,404
113,301
Accounting policy
The Group operates both defined benefit and defined contribution pension schemes as follows:
Defined contribution pensions
A defined contribution plan is a pension plan under which the Group pays fixed contributions to an independent entity. The Group has no legal obligations to pay further contributions after payment of the fixed contribution.
The contributions recognised in respect of defined contribution plans are expensed as they fall due. Liabilities and assets may be recognised if underpayment or prepayment has occurred and are included in current liabilities or current assets as they are normally of a short-term nature.
The assets of the schemes are held separately from those of the Group in an independently administered fund.
Defined benefit pensions
The Group contributes to defined benefit schemes which require contributions to be made to separately administered funds.
A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and salary. The legal obligations for any benefits from this\u00a0kind of pension plan remain with the Group, even if plan assets for funding the defined benefit plan have been set aside.
Scheme liabilities are measured using the projected unit funding method, applying the principal actuarial assumptions at the balance sheet date. Assets are measured at market value. In accordance with IFRIC 14, the asset that is recognised is restricted to\u00a0the amount by which the IAS 19 service cost is expected, over the lifetime of the scheme, to exceed funding contributions payable in respect of accruing benefits, or to the amount of any unconditional right to a refund, if greater.
Where the Group has a contractual obligation to make good any deficit in its share of a Local Government Pension Scheme (LGPS) but also has the right to recover the costs of making good any deficit from the Group\u2019s client, the fair value of that guarantee asset has been recognised and disclosed. Movements in the guarantee asset are taken to the Consolidated Statement of Profit or Loss and to the Consolidated Statement of Comprehensive Income to match the movement in pension assets and liabilities.
The Group recognises the pension liability and guarantee assets separately on the face of the Consolidated Balance Sheet.
Actuarial gains and losses are taken to the Consolidated Statement of Comprehensive Income as incurred. For this purpose, actuarial gains and losses comprise both the effects of changes in actuarial assumptions and experience adjustments arising because of differences between the previous actuarial assumptions and what has actually occurred.
Other movements in the net surplus or deficit are recognised in the Consolidated Statement of Profit or Loss, including the current service cost, any past service cost and the effect of curtailments or settlements. The net interest cost is also charged to the Consolidated Statement of Profit or Loss. The amount charged to the Consolidated Statement of Profit or Loss in respect of these plans is included within operating costs.
When the Group ceases its participation in a defined benefit pension scheme, the difference between the carrying value of the\u00a0scheme as calculated on an IAS 19 basis and any deficit payment or surplus receipt due is recognised in the Consolidated Statement of Profit or Loss as\u00a0a settlement.
The Group\u2019s contributions to the scheme are paid in accordance with the rules of the scheme and the recommendations of\u00a0the\u00a0scheme actuary.
Defined benefit assets
Assets for Group schemes are based on the latest asset information provided by the scheme administrators.
Scheme assets for other schemes have been estimated by rolling forward the published asset position from the previous year using market index returns over the period. This is considered to provide a good estimate of the fair value of the scheme assets and the values will be updated to\u00a0actuals each time a triennial valuation takes place.
153
Accounting policy\u00a0continued
Defined benefit liabilities
A number of key estimates have been made, which are given below, and which are largely dependent on factors outside the control\u00a0of the Group:
inflation rates;
mortality;
discount rate; and
salary and pension increases.
Details of the particular estimates used are included in this note. Sensitivity analysis for these key estimates is included below.
Where the Group has a contractual obligation to make good any deficit in its share of an LGPS but also has the right to recover the costs of making good any deficit from the Group\u2019s client, the fair value of that asset has been recognised and disclosed. The right to\u00a0recover costs is limited to exclude situations where the Group causes the scheme to incur service costs in excess of those which would have been incurred were the members employed within Local Government. Management has made judgements in respect of\u00a0whether any of the deficit is as a result of such situations.
The right to recover costs is also limited to situations where any cap on employer contributions to be suffered by the Group is not set so as to contribute to reducing the deficit in the scheme. Management, in conjunction with the scheme actuaries, has made judgements in respect of the predicted future service cost and contributions to the scheme to reflect this in the fair value of the asset recognised.
Key sources of estimation uncertainty
The net position on defined benefit pension schemes is a key source of estimation uncertainty. Given the importance of this area and to ensure appropriate estimates are made based on the most relevant information available, management has continued to engage with third-party advisers in assessing each of the underlying assumptions. The discount rate is derived from the return on corporate bond yields, and whilst this is largely observable, any change in discount rates in the future could have a material impact on the carrying value of the defined benefit obligation. Similarly, inflation rates and mortality assumptions impact the defined benefit obligation as they are used to model future salary increases and the duration of pension payments. Whilst current assumptions use projected future inflation rates and the most up-to-date information available on expected mortality, if these estimates change, the defined benefit obligation could also change materially in future periods", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147935": { "value": "Defined benefit schemes\u00a0continued
The amounts recognised in the Consolidated Balance Sheet are:
2024
2023
Group
schemes
\u00a3\u2019000
Other
schemes
\u00a3\u2019000
Total
\u00a3\u2019000
Group
schemes
\u00a3\u2019000
Other
schemes
\u00a3\u2019000
Total
\u00a3\u2019000
Quoted assets
Equities
1,781
54,765
56,546
1,473
45,399
46,872
Bonds
59,865
20,894
80,759
94,184
17,576
111,760
Pooled investment vehicles
Property
1,905
\u2013
1,905
\u2013
520
520
Multi-asset funds
48,145
3,617
51,762
20,381
470
20,851
Alternative asset funds
2,095
3,781
5,876
2,724
\u2013
2,724
Return seeking funds
1,548
1,307
2,855
1,923
784
2,707
Other assets
Equities
\u2013
7,053
7,053
\u2013
14,507
14,507
Bonds
\u2013
4,529
4,529
\u2013
4,121
4,121
Property
\u2013
14,920
14,920
2,008
9,137
11,145
Derivatives
707
60
767
2,790
\u2013
2,790
Cash and other
6,212
4,505
10,717
6,040
19,049
25,089
Investment liabilities
Derivatives
(3,379)
\u2013
(3,379)
(2,029)
\u2013
(2,029)
Group\u2019s estimated asset share
118,879
115,431
234,310
129,494
111,563
241,057
Present value of funded scheme liabilities
(97,210)
(76,705)
(173,915)
(109,659)
(83,342)
(193,001)
Pension surplus/deficit
21,669
38,726
60,395
19,835
28,221
48,056
Scheme surpluses not recognised as assets
\u2013
(37,150)
(37,150)
\u2013
(28,393)
(28,393)
Pension asset/(liability) recognised
21,669
1,576
23,245
19,835
(172)
19,663
Pension guarantee assets
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
The amounts recognised in the Consolidated Statement of Profit or Loss are as follows:
2024
2023
Group
schemes
\u00a3\u2019000
Other
schemes
\u00a3\u2019000
Total
\u00a3\u2019000
Group
schemes
\u00a3\u2019000
Other
schemes
\u00a3\u2019000
Total
\u00a3\u2019000
Current service cost
809
1,490
2,299
843
1,595
2,438
Past service cost
\u2013
224
224
\u2013
\u2013
\u2013
Settlement and curtailment
\u2013
(2,413)
(2,413)
\u2013
58
58
Administration costs
489
\u2013
489
347
\u2013
347
Total operating charge
1,298
(699)
599
1,190
1,653
2,843
Net interest
(926)
(1,261)
(2,187)
(1,162)
(1,528)
(2,690)
Effects of limitation of recognisable surplus related to net interest
\u2013
1,298
1,298
\u2013
1,528
1,528
Total charged to the profit for the year
372
(662)
(290)
28
1,653
1,681
Defined benefit schemes\u00a0continued
Actuarial gains and losses recognised in other comprehensive income (OCI) are as follows:
2024
2023
Group
schemes
\u00a3\u2019000
Other
schemes
\u00a3\u2019000
Total
\u00a3\u2019000
Group
schemes
\u00a3\u2019000
Other
schemes
\u00a3\u2019000
Total
\u00a3\u2019000
Return on plan assets (below)/above that recorded in net\u00a0interest
(12,755)
(377)
(13,132)
(1,877)
7,741
5,864
Actuarial gain arising from changes in\u00a0demographic\u00a0assumptions
1,337
178
1,515
1,840
202
2,042
Actuarial gain/(loss) arising from changes in\u00a0financial\u00a0assumptions
10,739
10,029
20,768
(2,058)
(579)
(2,637)
Actuarial gain/(loss) arising from liability experience
984
(11)
973
(3,671)
(11,547)
(15,218)
Effects of limitation of recognisable surplus related to OCI movements
\u2013
(7,459)
(7,459)
\u2013
4,428
4,428
Total gains/(losses) recognised in OCI
305
2,360
2,665
(5,766)
245
(5,521)
Changes in the present value of the defined benefit obligations are as follows:
2024
2023
Group
schemes
\u00a3\u2019000
Other
schemes
\u00a3\u2019000
Total
\u00a3\u2019000
Group
schemes
\u00a3\u2019000
Other
schemes
\u00a3\u2019000
Total
\u00a3\u2019000
Present value of obligations at 1 January
109,659
83,342
193,001
104,351
98,412
202,763
Current service cost
809
1,490
2,299
843
1,595
2,438
Past service cost
\u2013
224
224
\u2013
\u2013
\u2013
Interest on obligations
4,821
3,740
8,561
4,855
3,205
8,060
Plan participants\u2019 contributions
191
410
601
201
455
656
Benefits paid
(5,210)
(2,305)
(7,515)
(4,480)
(1,505)
(5,985)
Contract transfer
\u2013
\u2013
\u2013
\u2013
(30,284)
(30,284)
Settlements
\u2013
\u2013
\u2013
\u2013
(460)
(460)
Actuarial gain arising from changes in demographic\u00a0assumptions\u00a0
(1,337)
(178)
(1,515)
(1,840)
(202)
(2,042)
Actuarial (gain)/loss arising from changes in\u00a0financial\u00a0assumptions
(10,739)
(10,029)
(20,768)
2,058
579
2,637
Actuarial (gain)/loss arising from liability experience
(984)
11
(973)
3,671
11,547
15,218
Present value of obligations at 31 December
97,210
76,705
173,915
109,659
83,342
193,001
Changes in the fair value of the plan assets are as follows:
2024
2023
Group
schemes
\u00a3\u2019000
Other
schemes
\u00a3\u2019000
Total
\u00a3\u2019000
Group
schemes
\u00a3\u2019000
Other
schemes
\u00a3\u2019000
Total
\u00a3\u2019000
Fair value of plan assets at 1 January
129,494
111,563
241,057
128,023
133,689
261,712
Expected return on plan assets
5,747
5,001
10,748
6,017
4,733
10,750
Employer\u2019s contributions
1,901
1,139
3,040
1,957
1,236
3,193
Share of surplus received
\u2013
(2,413)
(2,413)
\u2013
\u2013
\u2013
Plan participants\u2019 contributions
191
410
601
201
455
656
Benefits paid
(5,210)
(2,305)
(7,515)
(4,480)
(1,505)
(5,985)
Scheme administration costs
(489)
\u2013
(489)
(347)
\u2013
(347)
Contract transfer
\u2013
\u2013
\u2013
\u2013
(33,782)
(33,782)
Settlements
\u2013
2,413
2,413
\u2013
(1,004)
(1,004)
Return on plan assets (below)/above that recorded in net\u00a0interest
(12,755)
(377)
(13,132)
(1,877)
7,741
5,864
Fair value of plan assets at 31 December
118,879
115,431
234,310
129,494
111,563
241,057
26. Capital commitments
The Group had no capital commitments at 31 December 2024 or at 31 December 2023.
27. Contingent liabilities
The Group had no contingent liabilities at 31 December 2024 or at 31 December 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9151652": { "value": "28. Related party transactions
Identity of related parties
The Group has a related party relationship with its pension schemes, its subsidiaries and its Directors.
Pension schemes
Details of contributions to pension schemes are set out in note 25.
Subsidiaries
The Group has a central treasury arrangement in which all subsidiaries participate. Management does not consider it meaningful to set out details of transfers made in respect of this treasury arrangement between companies, nor does it consider it meaningful to set out details of interest or dividend payments made within the Group.
Transactions with key management personnel
The Group has identified key management personnel as the Directors of Mears Group PLC.
Key management personnel held the following percentage of voting shares in Mears Group PLC:
2024
%
2023
%
Directors
0.5
0.3
Key management personnel\u2019s compensation is as follows:
2024
\u00a3\u2019000
2023
\u00a3\u2019000
Salaries including social security costs
1,910
1,783
Contributions to defined contribution pension schemes
19
56
Share-based payments
1,477
694
3,406
2,533
Further details of Directors\u2019 remuneration are disclosed within the Remuneration Report.
Dividends totalling \u00a30.06m (2023: \u00a30.04m) were paid to Directors during the year.
Transactions with other related parties
During the year the Group provided maintenance services to Pyramid Plus South LLP, an entity in which the Group is a 30% member, totalling \u00a316.4m (2023: \u00a312.1m). Pyramid Plus South LLP also made recharges of certain staff costs to the Group totalling \u00a30.7m (2023:\u00a0\u00a30.2m). At 31 December 2024, \u00a30.2m (2023: \u00a31.4m) was due to the Group in respect of these transactions. Pyramid Plus also\u00a0owed\u00a0the Group \u00a31.0m (2023: \u00a30.1m) in respect of agreed distributions", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147900": { "value": "public limited company ", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147902": { "value": "England and Wales", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "shtag_9147901": { "value": "2nd Floor 5220 Valiant Court, Gloucester Business Park, Brockworth, Gloucester GL3 4FE", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:213800DHCALLH8IRJV57", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } } } }